Why PPA and Lease Math Breaks Under California NEM 3.0

In California, many long-term contracts charge you for generation volume even when that generation is not actually helping your bill.

A central trap in many California PPA and lease contracts is that the customer pays based on what the system generates, not on what the household actually benefits from.

Under NEM 3.0, excess daytime generation can be exported at very low value. If the system is structured poorly, the homeowner may pay for lots of kilowatt-hours while only capturing a fraction of their real value.

That is why California’s current compensation rules often clash directly with lease and PPA logic. In many cases, direct ownership is the safer path.